University of Ghana, Accra, Policy Evaluation Department of Ministry of Foreign Affairs, the Netherlands; Centre for World Food Studies (SOW-VU)

Project sponsor

Policy Evaluation Department of Ministry of Foreign Affairs, the Netherlands

Over the past decades, awareness among donors has increased that aid policies may conflict with non-aid policies, such as for instance the donor’s own agricultural or migration policy. Better coordination across different policy fields has been forwarded as solution, now known as Policy Coherence for Development (PCD), which would also meet the demands to increase the efficiency of aid money.

SOW-VU contributed to a study, initiated by the Policy and Operations Evaluation Department (IOB) of the Dutch Ministry of Foreign Affairs, that makes an assessment to which extent donor policies have been coherent in the case of Ghana. It looks specifically to the impact of selected aid and non-aid policies pursued by the Netherlands and by the EU over the period 2006-2011, both qualitatively and quantitatively, through the design of counterfactuals in a simulation model.

One counterfactual considers the impact of Dutch aid policies itself, by establishing what would happen if the current policies would have implemented a few years earlier. Another series of counterfactuals investigated the coherence with non-aid policies: changes in timing and conditions of the Economic Partnership Agreement, a reduction of market protection of the EU, as part of the Common Agricultural Policy (CAP), changes in timing of the bilateral tax treaty between the Netherlands and Ghana, and changes in the migration policy in the Netherlands. Overall, the policies investigated do not appear to be overly incoherent, and mostly the effects are small, or even negligible.

The study also recalls the importance of foreign aid, which appears to be crucial for education and health, but emphasizes that Ghana is in transition, entering a regime of trade liberation, with increased flows of FDI and that it needs to discipline its domestic policies to foster inclusive growth. Therefore it has to strengthen its autonomy and develop adequate capacity for the implementation of a multi-sectoral growth strategy. The role of the donors will change also: they may consider how they can assist in fostering Ghana‘s agency.